Wall St. Barely Budges Amid Concerns for Europe

Stocks were little changed on Wednesday as concerns about debt problems in Europe persisted, and new reports showed inflation remaining low and the housing sector in the United States remaining weak.

The Standard & Poor’s 500-stock index posted a small gain after four days of declines.

Stocks traded lower this week as finance ministers from the 16 countries that use the euro met in Brussels to discuss aid for Ireland. Investors have worried that Ireland’s debt problems could spread to other countries that use the euro, primarily to Portugal and to Spain.

But on Wednesday, the British government signaled that it could offer Ireland direct financial aid. Officials from the European Union and the International Monetary Fund are due in Ireland on Thursday to discuss its financial problems.

“I think it is a pretty significant issue from a standpoint of potential contagion from the sovereign or banking issues,” said Keith B. Hembre, the chief economist and chief investment strategist at First American Funds. “It has served within the markets as a proxy for risk appetite,” he said.

The Dow Jones industrial average, which briefly fell below 11,000 on Tuesday for the first time since mid-October, lost 15.62 points, or 0.14 percent, to close at 11,007.88.

The S.& P. rose 0.25 points, or 0.02 percent, to 1,178.59 while the Nasdaq composite index was up 6.17 points, or 0.25 percent, at 2,476.01.

The market wavered, then rose slightly in afternoon trading after the United States government released reports on inflation and the housing sector. The Labor Department reported that the Consumer Price Index rose 0.2 percent in October, compared with 0.1 percent in September. The core inflation rate — the measure of consumer prices excluding food and energy prices — was flat, or marginally lower, while the annual rate of core prices was up 0.6 percent, the smallest increase since the government started keeping the records in 1957.

A Commerce Department report showed that housing starts fell in October to the lowest level in more than a year.

Photo

Work continued in Derry, N.H., this week as the government said housing starts fell in October.Credit
Charles Krupa/Associated Press

David Kelly, the chief market strategist for J. P. Morgan Funds, also referring to a new report on Wednesday on a decline in mortgage applications, said the recent economic indicators justified declines in the equity market.

“Longer-term, however, we continue to expect a gradual recovery in the U.S. economy and a gradual pullback from quantitative easing, leading to higher stock prices and interest rates,” Mr. Kelly said, referring, in part, to the Federal Reserve’s program to buy government debt and increase the amount of cash in the economy.

“The economic numbers this week are a little on the disappointing side,” Mr. Kelly added. “The fears of deflation can’t quite be put to bed. It is reasonable to be a little glum that we are not seeing any acceleration in the economy.”

But Mr. Kelly said he believed that the markets had generally overreacted to the debt problems in Europe, partly because Ireland is determined to reduce its budget.

The dollar was slightly lower, and the euro was up slightly, at $1.3523.

The Treasury’s benchmark 10-year note fell 10/32, to 97 26/32, and the yield rose to 2.88 percent, from 2.84 percent late on Tuesday.

Retail shares led the broader market. Target rose nearly 4 percent, or $2.08, to $55.62 after reporting a 23 percent increase in third-quarter profit and an upbeat outlook for same-store sales in the fourth quarter.

After the housing report, shares of home builders fell. D. R. Horton fell 34 cents, or 3.09 percent, to $10.68. PulteGroup declined more than 2 percent, or 15 cents, to $6.74.

The financial sector declined, pulled down by Citigroup, which closed down 3 cents, to $4.19, and Bank of America shares, which fell 32 cents, to $11.62.

Human Genome Sciences, one of the most actively traded shares on the Nasdaq, fell more than 5 percent, or $1.37, to $24.51. The company’s lupus drug, Benlysta, moved a step closer to the market on Tuesday by winning an endorsement from a committee that advises the Food and Drug Administration.

But analysts from Citi said the process had raised criticism about the drug’s benefits, and the analysts were concerned about long-term sales.

A version of this article appears in print on November 18, 2010, on page B12 of the New York edition with the headline: Wall St. Barely Budges Amid Concerns for Europe. Order Reprints|Today's Paper|Subscribe